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Advantages & Disadvantages of Leasing
& Buying
| ADVANTAGES -
Leasing |
| • |
Little or no down payment. |
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Lower monthly payments (up to 50%)
so more of your cash is available for other
purchases. |
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More car for less money. |
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Drive a newer vehicle, so less
maintenance worries. |
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Sales taxes paid over term of lease. |
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Businesses maintain cash position,
conserve capital and receive tax advantages. |
| DISADVANTAGES -
Buying |
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Higher initial cash outlay. |
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Higher monthly payments. |
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Fewer dollars available for other
uses. |
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New tax laws eliminate advantages of
owning. |
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Sales tax is no longer deductible |
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Finance interest on conventional loans is no
longer tax deductible |
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Investment tax credit has been eliminated |
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Depreciation has been extended from
three to five |
Facts on Leasing
Popularity Explosion - Leasing has grown more
than tenfold in less than a decade. It accounts for more
then 36% of the over 15 million vehicles sold in the
United States each year. Why the dramatic upsurge in
leasing?
The main causes are declining disposable savings amounts
in America and changes to the tax laws. In 1987, more
than 70% of disposable savings was available for the
purchase of consumer goods. By 1993, that figure had
declined to less than 40%. The percentage continues its
downward slide. Additionally, the many tax deductions
that favored purchasing over leasing were eliminated.
Since those tax laws were changed, leasing has enjoyed a
steady 2% to 3% increase per year for about the last ten
years.
The bottom line: leasing is an
inexpensive way to finance a car.
Call us at: 1-866-309-7700
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